On October 17, 2018, it became legal to buy and grow small amounts of marijuana in Ontario. However, the idea of ​​buying a house that has been used to grow marijuana can cause confusion among some buyers. Therefore, it is important to understand if this really is something to worry about and take the appropriate measures to protect our interests.

The real estate agent’s responsibility will always be to disclose as much information as possible to his client, since this will be the base on the decision to buy or keep looking. However, the seller is not in full obligation to disclose all the details about their property.

To understand what it is really mandatory to mention about a property, it is important to remember the distinction between the stigmas that relate to the past of a house and the physical defects in the structure.

Stigma

A stigma is a non-physical attribute of a property that can trigger a negative emotional or psychological response in a potential buyer. However, the events or circumstances that provoke the response do not necessarily have to do with the function or appearance of the property. Examples include a house that was previously occupied by a notorious criminal, or, a house where a suicide occurred.

Facts that may constitute a stigma will vary from one buyer to another, depending on their sensitivity to certain issues. For example, a buyer may believe that a house where a marijuana plant was legally grown is stigmatized, while another buyer may have no concern. In Ontario, there is no requirement for sellers to disclose the existence of facts that may cause stigmas in buyers. However, the buyer’s representative can make specific inquiries about problems that are important to his client.

Defects

A defect, on the other hand, is a physical attribute of the property. Physical defects are divided into two broad categories: patents, those that are easily visible or can be identified during an inspection without involving further investigation. For example, damage or visible stains may suggest a leak of water from the ceiling or from the bathroom. Regarding patent defects, there is no requirement for the seller to disclose these.

Latent defects are not evident and may not be easily detectable, even by a housing inspector or other expert. If the latent defect represents a serious risk to the health and safety of those living in the home, the seller must disclose it. Examples of latent defects that must be disclosed include structural problems that make residency hazardous to occupy, attrition or damage to public service systems that put occupants at risk.

Marijuana and Property Damage

It is important to understand the difference between patents and latent defects, since it applies to the cultivation of cannabis. Growing marijuana inside a home can not necessarily cause physical damage to a property. If there is no physical damage or if the damage has been completely remedied and, therefore, is free of any defects, the house’s history remains a possible cause of stigma if it is a concern for the buyer.

How it affects the Sellers

Before listing a property for sale, it is important to discuss with the seller any problems that may be relevant to a potential buyer.

If the cultivation of marijuana has damaged the property to the point that the house is not safe to live, and the defect is not obvious to the naked eye, it is a latent defect that must be revealed.

The problem is less clear if the property was previously used to grow marijuana but is not damaged in any way. Ontario courts have determined that sellers do not have to proactively disclose the history of their home during their property, even if the property carries a stigma. However, there is nothing to prevent a buyer from trying to sue the seller for not revealing the stigma. Even if demand is unlikely to be successful, the seller could still face a long and expensive legal process.

A buyer’s real estate agent can also ask specifically if the house was ever used to grow marijuana. In this case, there are two options: you can answer with sincerity or refuse to answer the question and direct the buyer to do your own research. The choice of these options rests exclusively with the seller. It is important to note that under no circumstances can a stigma be revealed without the seller’s consent.

How it affects the Buyers

The agent’s responsibility is to work with his client to ensure that the property suits his needs. A key component of that is a clear understanding of what they want and need in a property, and what they absolutely do not want.

During these conversations, if the buyer has made it clear that they do not want to buy a house where marijuana has been grown, there are several steps the agent must take to ensure that their wishes are met.

First, when the buyer is interested in a property, he can make direct inquiries to the seller’s representative. The seller’s representative may choose to answer the query or direct him to do his own research.

Second, regardless of the response offered by the seller, it is advisable to conduct an independent investigation into the past of the property. This could include a simple online search of the address or obtain other public records related to the property. Many municipalities or police services maintain records of residences that have been used to grow marijuana illegally. However, this research is likely to discover only large-scale farming operations, not the small-scale cultivation of a few marijuana plants.

Third, you can try to include in your offer the seller’s guarantee that the house was not used to grow marijuana. Normally, and for obvious reasons, this type of guarantee should only cover the period of ownership and occupation of the seller. Depending on the provision of the contract, if the seller refuses to accept the guarantee, it may indicate that the property was used as a marijuana crop, or it may simply mean that the seller does not know what happened on the property before they bought it. In any case, the agent and the client should have more discussions about it.

Conclusion

Although the legalization of cannabis does not significantly alter existing disclosure requirements, many buyers and sellers will have questions about what this means to them.

The best solution is to contact the real estate agent, who will be responsible for providing the necessary, clear and transparent information to make the right decision.